Are Housing Scams Aiding Class Gentrification?

Fraudulent lenders and other scam artists prey on communities like Bed-Stuy, but what is the community's long-term action plan?

The sounds of honking horns and supportive chants that brought the small gray house at 320 Tompkins Avenue to life have ended.

Today, it sits enveloped by a deafening silence.

In a spirited display of community solidarity, residents, local politicians and housing advocates gathered to thwart the scheduled eviction of 82-year-old , who was a victim of a predatory lending scam.

Real estate speculators target people of color, the poor and the elderly, which makes Ward and neighborhoods like Bed-Stuy ripe for fraudulent lenders and other scam artists.

Furthermore, Bed-Stuy has one of the highest rates of housing foreclosures in the country, in essence, rendering the community vulnerable to housing speculators at auctions.

This involuntary exchange of property into the hands of those looking to benefit off of another's misfortune, weeds out many long-term residents, inevitably accelerating class gentrification.

The community continues to fight to save Ward’s home. If they are successful, great. However, what will be done about the hundreds more who languish in the same predicament. In other words, what is the community's long-term action plan?"

Once a homeowner goes into default, eventually, it becomes public knowledge. Next, they begin receiving personalized solicitations in the form of a fake olive branch. Solicitors begin knocking on their door, calling their house, sending official-looking mail. Offering "help."

Imelba Rodriguez, senior program director of the Bridge Street Development Corporation, BSDC, – a community based organization that offers a number of services including workshops on the dangers of predatory lending and foreclosures – said a lot of residents make the mistake of reaching out to and paying private solicitors before seeking help from local organizations.

Some residents equate cost of service with results and think that free community based organizations cannot do the same job offered by private solicitors, she said.

“They pay these people. But soon the office is closed, the phone number is disconnected, the person is gone, and they are out of money that could have gone towards their mortgage.”

There seems to be another reason some residents seek help from private solicitors first – they’re afraid to speak up locally. “Our houses are being taken. You can go to a block association meeting and the person sitting beside you could be in foreclosure and wouldn’t say a word,” she said. “People are private and don’t won’t to admit they need help.”

Once residents recognize there is no shame in seeking help, we can begin making progress by leaning on each other more and coming up with ways to save homes on a community level.

Yes, holding blockades for residents facing eviction is helpful, and perhaps we consider building a community association that arranges ongoing blockades for residents. But is that approach sustainable long-term?

Although protesting kept Ward in her home an extra week, 768 Dean Inc., the property's speculators, plan to continue with her eviction. Another protest is planned for this Wednesday, but there is no guarantee that she’ll get to stay in her home.

What if the community had a Bedford-Stuyvesant Rainy Day Fund? Perhaps the community can come together and form a credit union where homeowners can opt to pay a certain amount (maybe $30-$50) every month into a fund where they can pull for their mortgage payment up to twice after a certain time-period of savings, if they fall behind. 

More immediately, homeowners have to act quickly. Don’t wait. They must open their mail; answer the calls from the bill collector, make arrangements, something Rodriguez said many residents avoid due to fear.

More importantly, they must know the facts and reach out to community organizations that educate on foreclosure, and predatory lending first.

If we cannot recognize when it's time to address a problem, or even feel comfortable enough to reach out to our community for help, we will continue to trust the wrong people and continue to lose our homes to real estate speculators at auctions.

Sylvia A. Harvey (SAH) is a freelance journalist: you can check out  her work at www.sylviaaharvey.com or link with her on  facebook or twitter.

Christina August 29, 2011 at 07:13 PM
Perhaps there should be another approach to this matter. Some residents are not aware that information concerning their homes is on the internet. Should this information be public knowledge? Yes people of all ages get caught up in these scams for lack of knowledge. Knowledge is power and most people don't get the knowledge until there is a problem. Block Association members should be well acquainted with the residents on their block. Block Association members should be used as a reliable resource, sort of a go to resource. The Community Board meetings are filled with resourceful information and people willing to help. There's many ways to tackle this matter but what is the best solution?
Anthony August 29, 2011 at 07:55 PM
@Pat You can't possibly blame the homeowner. There's a reason why they call it predatory lending. They lender is a financial institution that knows all about the protocols of issuing a loan and the subprime market. It's the ultimate rip off. There is a vetting process, correct? The bank asks you for all this information before they give you any money. They know this person can't pay the loan in the first place so they lie in order to get it approved. You might ask, why would they do that,won't the bank lose if they give out loans to people that can't pay? Nope. They sell your debt to overseas banks who can't even verify any of the mortgagee's info. It is not the homeowner forging documents or knowingly selling bad debt around the globe. Stop drinking the kool-aid.
pat August 29, 2011 at 08:17 PM
So, let me offer you this, even though you know you can't pay. Hey we can both look the other way and get what we wan't. That is how predatory lending works, two sides to the coin, it is playing with fire, but fire you know you are playing with nonetheless. Believe it, or not even those easy to get loans of years past can be paid off if the person could afford it in the first place. Just because loans were easy to get does not mean they were astronomical in interest. The money that was taken from this woman should be recovered through lawsuits, that may be a way for her to get help from the protesters in the street. The property is no longer hers Anthony, sorry that is not what you want to hear, but that is reality. I don't drink kool-aid, I just like to act based on reason and logic, not emotions. This lady was failed by many people, but the buyer of that property was not one of them.
Red August 30, 2011 at 05:10 PM
Pat, you’ve written, “speculators go where there is opportunity.” Yeah, that seems to be the moral of the story buddy. Unless, of course you disagree that Bedford-Stuyvesant is a hotbed of opportunity. And it seems that the concept of Bed-Stuy Patch is to write about Bed-Stuy not "any other city in America." And just because it's happening in other cities does that make it okay? The people in this nabe can't pay their mortgage for a number of reasons (including some of the ones you've mentioned), and the fact that they fall victim to scams is one of them. Yes, Ms. Ward is a sympathetic victim, but she still had responsibilities that she neglected...and that seems to be the point. Homeowners need to take responsibility, but also be aware of predatory lenders preying on them.
Lizzie Walker September 28, 2011 at 09:59 PM
am very interested to know why it is not often discussed in these different posts how the poor struggling Black folks, like my grandparents, down through the years were denied reasonable financial opportunities (can you say banks? not HFC and the other one) to keep their property maintained. and how the scammers have come through over the years to "give them money" to fix up their property at usury rates (can you same aluminum siding for the facade? can you say subprime?). what about sweet talking 80 yr olds into "finally" doing something nice for themselves if they sign on the bottom line. OH! and while am at it ... a look behind the curtain reveals the home improvement contract has been sold to an "investment/developer" that doesn't allow you to miss but one or two "mortgage" payments before moving to take you property. on and on and on. my grandparents didn't lose their house because I became suspicious and helped to immediately payoff the debt. I'm just saying scamming in Bed-Stuy and other places ain't no joke ... there's history... can you say "redlining" and the such?


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